H.F. 691 Section 1. Section 331.391, subsection 4, Code 2019, is 1 amended to read as follows: 2 4. a. If a region is meeting the financial obligations 3 for implementation of its regional service system management 4 plan for a fiscal year and residual funding is anticipated, 5 the regional administrator shall reserve an adequate amount of 6 unobligated and unencumbered funds for cash flow of expenditure 7 obligations in the next fiscal year. 8 b. For fiscal years beginning July 1, 2017, July 1, 2018, 9 and July 1, 2019, that portion of each region’s cash flow 10 amount either reserved in the combined account or reserved 11 among all separate county accounts under the control of the 12 governing board that exceeds twenty-five percent of the gross 13 expenditures from the combined account or from all separate 14 county accounts under control of the governing board in the 15 fiscal year preceding the fiscal year in progress shall be used 16 in whole or in part to fund the payment of services provided 17 under the regional service system management plan under section 18 331.393 . 19 c. b. Each region shall certify to the department of 20 management on or before December 1, 2020 2022 , and each 21 December 1 thereafter, the amount of the region’s cash flow 22 amount in the combined account that is attributable to each 23 county within the region based upon each county’s proportionate 24 amount of funding and contributions to the region or other 25 methodology specified in the regional governance agreement 26 or certify the cash flow amount for each separate county 27 account that is under the control of the governing board at the 28 conclusion of the most recently completed fiscal year. 29 d. (1) c. For fiscal years beginning on or after July 30 1, 2021 2023 , for each region having a population of one 31 hundred thousand or over, the region’s cash flow amount , either 32 reserved in the region’s combined account or reserved among all 33 separate county accounts under the control of the governing 34 board, shall not exceed twenty forty percent of the gross 35 -1- LSB 2763HV (3) 88 md/rh 1/ 7

H.F. 691 expenditures from the combined account or from all separate 1 county accounts under control of the governing board for the 2 fiscal year preceding the fiscal year in progress. 3 (2) For fiscal years beginning on or after July 1, 2021, 4 for each region having a population of less than one hundred 5 thousand, the region’s cash flow amount shall not exceed 6 twenty-five percent of the gross expenditures from the combined 7 account or from all separate county accounts under control of 8 the governing board for the fiscal year preceding the fiscal 9 year in progress. 10 Sec. 2. Section 331.424A, subsection 1, paragraph b, Code 11 2019, is amended to read as follows: 12 b. “Cash flow reduction amount” means the amount calculated 13 under subsection 4 and used to reduce a county budgeted amount 14 under subsection 9 for fiscal years beginning on or after July 15 1, 2021 2023 . 16 Sec. 3. Section 331.424A, subsection 4, Code 2019, is 17 amended to read as follows: 18 4. a. An amount of unobligated and unencumbered funds, 19 as specified in the regional governance agreement entered 20 into by the county under section 331.392 , shall be reserved 21 in the county services fund to address cash flow obligations 22 in the next fiscal year, subject to the limitations of this 23 subsection . 24 b. For fiscal years beginning July 1, 2017, July 1, 2018, 25 and July 1, 2019, that portion of each county’s cash flow 26 amount reserved in the county services fund that exceeds an 27 amount equal to twenty-five percent of the gross expenditures 28 from the county services fund in the fiscal year preceding 29 the fiscal year in progress shall be used in whole or in part 30 to fund the county’s financial obligations for the payment of 31 services provided under the regional service system management 32 plan under section 331.393 . 33 c. b. Each county shall, as part of the financial report 34 required under section 331.403 , certify the county’s cash flow 35 -2- LSB 2763HV (3) 88 md/rh 2/ 7

H.F. 691 amount in the county services fund at the conclusion of the 1 most recently completed fiscal year. 2 d. c. For each fiscal year beginning on or after July 3 1, 2021 2023 , of a county’s cash flow amount maintained in 4 the county services fund or of the region’s cash flow amount 5 attributable to the county under section 331.391, subsection 6 4 , paragraph “c” “b” , an amount equal to the county’s cash flow 7 reduction amount shall be used to fund the county’s financial 8 obligations for the payment of services provided under the 9 regional service system management plan under section 331.393 . 10 e. d. (1) For each fiscal year beginning on or after July 11 1, 2021 2023 , each county’s cash flow reduction amount shall be 12 determined as follows and shall result in a reduction of the 13 county budgeted amount determined pursuant to subsection 9 : 14 (1) For each county located in a region having a population 15 of one hundred thousand or over, the county’s cash flow 16 reduction amount equals equal to the sum of the county’s cash 17 flow amount in the county services fund plus the most recent 18 amount certified by the region for the county under section 19 331.391, subsection 4 , paragraph “c” “b” , minus twenty forty 20 percent of the gross expenditures from the county services 21 fund in the fiscal year preceding the fiscal year in progress. 22 However, the cash flow reduction amount shall not be less than 23 zero and shall not exceed the county budgeted amount determined 24 under subsection 9 prior to any reduction resulting from the 25 cash flow reduction amount. 26 (2) For each county located in a region having a population 27 of less than one hundred thousand, the county’s cash flow 28 reduction amount equals the sum of the county’s cash flow 29 amount in the county services fund plus the most recent amount 30 certified by the region for the county under section 331.391, 31 subsection 4 , paragraph “c” , minus twenty-five percent of the 32 gross expenditures budgeted from the county services fund for 33 the fiscal year in progress. However, the cash flow reduction 34 amount shall not be less than zero and shall not exceed the 35 -3- LSB 2763HV (3) 88 md/rh 3/ 7

H.F. 691 county budgeted amount determined under subsection 9 prior to 1 any reduction resulting from the cash flow reduction amount. 2 For the applicable fiscal years, each county’s cash flow 3 reduction amount calculated pursuant to this paragraph shall 4 result in a reduction of the county budgeted amount determined 5 pursuant to subsection 9. 6 Sec. 4. Section 331.424A, subsection 9, Code 2019, is 7 amended to read as follows: 8 9. a. For the fiscal year beginning July 1, 2017, and each 9 subsequent fiscal year, the county budgeted amount determined 10 for each county shall be the amount necessary to meet the 11 county’s financial obligations for the payment of services 12 provided under the regional service system management plan 13 approved pursuant to section 331.393 , not to exceed an amount 14 equal to the product of the regional per capita expenditure 15 target amount multiplied by the county’s population, and, for 16 fiscal years beginning on or after July 1, 2021 2023 , reduced 17 by the amount of the county’s cash flow reduction amount for 18 the fiscal year calculated under subsection 4 , if applicable. 19 b. If a county officially joins a different region, the 20 county’s budgeted amount shall be the amount necessary to meet 21 the county’s financial obligations for payment of services 22 provided under the new region’s regional service system 23 management plan approved pursuant to section 331.393 , not to 24 exceed an amount equal to the product of the new region’s 25 regional per capita expenditure target amount multiplied by 26 the county’s population, and, for fiscal years beginning on or 27 after July 1, 2021 2023 , reduced by the amount of the county’s 28 cash flow reduction amount for the fiscal year calculated under 29 subsection 4 , if applicable. 30 Sec. 5. COUNTY BUDGET AMENDMENT AND RECERTIFICATION —— 31 REGIONAL SERVICE SYSTEM MANAGEMENT PLAN AMENDMENT. 32 1. To the extent necessary to implement the provisions 33 of this Act, a county may amend that portion of the county’s 34 budget related to cash flow amounts in the county mental health 35 -4- LSB 2763HV (3) 88 md/rh 4/ 7

H.F. 691 and disability services fund for the fiscal year beginning July 1 1, 2018. 2 2. If this Act takes effect on or after March 15, 2019, 3 notwithstanding section 24.17, for the fiscal year beginning 4 July 1, 2019, a county may recertify the county’s budget as 5 necessary to implement the provisions of this Act. A budget 6 recertified pursuant to this section must be recertified 7 in duplicate to the county auditor not later than thirty 8 days after the effective date of this Act, and protests to 9 the budget shall be filed not later than ten days after the 10 county’s budget is recertified. 11 3. To the extent necessary to implement the provisions 12 of this division of this Act, a mental health and disability 13 services region may amend the region’s regional service system 14 management plan or annual service and budget plan approved 15 under section 331.393 for the fiscal year beginning July 1, 16 2018, or for the fiscal year beginning July 1, 2019. 17 Sec. 6. EFFECTIVE DATE. This Act, being deemed of immediate 18 importance, takes effect upon enactment. 19 Sec. 7. RETROACTIVE APPLICABILITY. This Act applies 20 retroactively to July 1, 2018, for fiscal years beginning on 21 or after that date. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 Current Code section 331.391(4) provides that if a region 26 is meeting the financial obligations for implementation of 27 its regional service system management plan for a fiscal 28 year and residual funding is anticipated, the regional 29 administrator shall reserve an adequate amount of unobligated 30 and unencumbered funds for cash flow of expenditure obligations 31 in the next fiscal year. Additionally, for fiscal years 32 beginning July 1, 2017, July 1, 2018, and July 1, 2019, that 33 portion of each mental health region’s cash flow amount that 34 exceeds 25 percent of the gross expenditures from the combined 35 -5- LSB 2763HV (3) 88 md/rh 5/ 7

H.F. 691 account or from all separate county accounts in the fiscal year 1 preceding the fiscal year in progress shall be used in whole 2 or in part to fund the payment of services provided under the 3 regional service system management plan. This bill strikes the 4 requirement that those excess amounts be used in that manner 5 for those fiscal years. 6 Under current law, for fiscal years beginning on or after 7 July 1, 2021, based on certain population thresholds, each 8 region’s cash flow amount is limited to 20 or 25 percent of 9 the gross expenditures from the combined account or from all 10 separate county accounts under control of the governing board 11 for the fiscal year preceding the fiscal year in progress. The 12 bill removes all population thresholds, delays implementation 13 of the limitation until the fiscal year beginning July 1, 2023, 14 and limits each region’s cash flow limitation percentage to 40 15 percent. 16 The bill makes similar changes to provisions governing the 17 cash flow amounts held and used by individual counties within 18 each region. The bill also modifies the calculation of each 19 county’s cash flow reduction amount under Code section 331.424A 20 for fiscal years beginning on or after July 1, 2023. An amount 21 equal to the county’s cash flow reduction amount is required 22 to be used to fund the county’s financial obligations for 23 the payment of services provided under the regional service 24 system management plan. Under the bill, the county cash flow 25 reduction amount equals the sum of the county’s cash flow 26 amount in the county services fund plus the most recent amount 27 certified by the region for the county, minus 40 percent of the 28 gross expenditures from the county services fund in the fiscal 29 year preceding the fiscal year in progress. 30 The bill provides that to the extent necessary to implement 31 the provisions of the bill, a county may amend that portion of 32 the county’s budget related to cash flow amounts in the county 33 mental health and disability services fund for the fiscal year 34 beginning July 1, 2018. The bill also provides that if the 35 -6- LSB 2763HV (3) 88 md/rh 6/ 7

H.F. 691 bill takes effect on or after March 15, 2019, notwithstanding 1 Code section 24.17, for the fiscal year beginning July 1, 2019, 2 a county may recertify the county’s budget as necessary to 3 implement the provisions of the bill. Similarly, to the extent 4 necessary to implement the provisions of the bill, a mental 5 health and disability services region may amend the region’s 6 regional service system management plan or annual service and 7 budget plan for the fiscal year beginning July 1, 2018, or for 8 the fiscal year beginning July 1, 2019. 9 The bill takes effect upon enactment and applies 10 retroactively to July 1, 2018, for fiscal years beginning on 11 or after that date. 12 -7- LSB 2763HV (3) 88 md/rh 7/ 7